Worldwide: SKP Global Expansion Updates - December 2017

Last Updated: 10 January 2018
Article by SKP  

We are pleased to present the November issue of SKP Global Updates – our newsletter that covers employment, payroll, Goods and Services Tax (GST)/Value Added Tax (VAT) and corporate tax related developments globally.

The key highlights of this issue include Mauritius extending the deadline for filling asset statement, change in the RRSP contribution limit in Canada, Malaysian 2018 National Budget of individual income tax and important tax provisions in 2018 budget in Ireland.

Africa

Ghana

Paperless system for tax exemptions Proposed

In November 2017, the Ministry of Finance announced the launch of an electronic tax exemption system, which will be dealing with the application, approval and granting of exemption from taxes and import duty waivers.

Effective Date: 01 January 2018

Nigeria

FIRS approves outstanding payment of foreign tax debts in Naira

Certain tax liabilities such as Value Added Tax (VAT) and Withholding Taxes (WHT) must be paid in the currency of transaction as the law of the country states. For instance, if a fee was paid in USD, then the applicable VAT and WHT must be remitted to the tax authority in USD.

The Federal Inland Revenue Service (FIRS) via notification dated 16 November 2017 approved the payment of outstanding foreign currency tax liabilities in Naira at the exchange rate of NGN 325 to USD 1. No rates were given for other major foreign currencies such as GBP and EUR.

The concession covers tax due up to 31 December 2016; taxes payable in respect of the current year 2017 are excluded. The payment must be made on or before 14 December 2017.

Tanzania

Submit biannual returns for Noncitizens

Employers must submit their returns, which are biannual reports of foreign workers, by December 31 in compliance with the Tanzanian Non-Citizens Act, 2015.

Any person who employs or engages a non-citizen in any occupation in Tanzania has to submit biannual returns on employment of non-citizens on 30 June and 31 December for the year.

Details of the return - The return must include the total number of foreign nationals and local employees currently employed, as well as those who have left the company in the past six months.

Americas

Argentina

Proposal for reduction of corporate income tax rate

Recently, a proposal has been presented by Argentina's Treasury (Ministerio de Hacienda) with respect to tax and labour reform plan. Following are the significant changes which have been proposed: " Introduction of consumption tax for certain crossborder digital services.

  • New capital gains tax which is applicable to Argentine residents.
  • Reduction of corporate income tax rate from 35% to 25%.
  • Incentives for companies to 'formalise' their labour force.
  • Reduction of employer social security taxes

Canada

Canada Revenue Agency proposes changes to tax employee benefits

In October, the Canada Revenue Agency (CRA) has made changes to its interpretation of the existing tax law concerning taxable employee benefits.

Following situations have considered discounts to be taxable:

  1. Employee or a group of employees to buy merchandise at a discount.
  2. An employee buying merchandise (other than old or soiled merchandise) for less than cost.
  3. An arrangement of employers so that employees of one employer can buy merchandise at a discount from another employer.

Discounts do not fall into these situations as the CRA does not view these as taxable benefits received by an employees.

If an employer receives a discount on merchandise because of their employment, then the value of the discount is generally included in employee's income. Generally, employers or third parties provide the discount.

Employers must continue to follow the Employers' Guide and Section 6 of the Income Tax Act when computing income from employment till a new policy directive or folio is issued. This includes computing taxable benefits such as automobiles or other motor vehicles, boarding and lodging, gifts and awards, life insurance policies, meals, interest free or low interest loans, security options, tuition fees.

Saskatchewan November 2017 business taxation amendments

In November 2017, Saskatchewan introduced a Bill to amend the Income Tax Act, 2000. The proposed changes are as follows:

  • The general corporate income tax rate had been increased from 11.5% to 12%.
  • The small business deduction threshold had been increased from CAD 500,000 to CAD 600,000.
  • The enhanced dividend tax credit rate had been revised for eligible dividends to 11%.
  • The Saskatchewan tax rate tables and the basic tax calculator have been revised to reflect this change.

Effective Date: 1 January 2017

Mexico

Updated Federal Revenue Law for 2018

Recently, Federal Revenue Law has been published in the Official Gazette for 2018.

Following are some of the important changes in the rules:

  • Increased surcharges have been increased from 0.75% to 0.98% for late payments, from 1% to 1.26% for payment in instalments up to 12 months, from 1.25% to 1.53% for payment in instalments between 12 and 24 months, and from 1.50% to 1.82% for payment in instalments exceeding 24 months and deferred payments.
  • After fulfilling certain conditions, fine for not fulfilling tax obligation has been reduced to 40% from 50%.
  • The withholding tax rate on interest payments has been reduced to 0.46% from 0.58%.
  • Additional deduction has been provided to taxpayers that employ individuals with a motor disability, individuals with an auditory or language disability, blind individuals, which is equal to 25% of the salaries effectively paid to such individuals and taxpayers who donate basic consumer goods equal to 5% of the cost of sales of such goods, provided that certain conditions are met.
  • Taxpayers who are engaged in public/private ground transportation and tourist activities can get a credit against their income tax due and 50% of the tolls paid for the use of national highways in the same tax year.
  • Taxpayers subject to tax under the incorporation tax rules can opt to pay the Value Added Tax (VAT) and the Impuesto Especial sobre Producción y Servicios (IEPS) with respect to transactions with the general public by application of different tax rates depending on the sector or industry.
  • Taxpayers are required to submit the required information (e.g. capital reimbursement, losses, related party transactions, corporative reorganisations and restructurings, international transactions, dividend payments) within 60 days after the end of each quarter, instead of submitting the information return on relevant transactions (i.e. Declaración Informativa de Operaciones Relevantes (DIOR)).

Effective Date: 1 January 2018.

Minimum salary threshold increased

Recently, the National Commission of Minimum Wages has passed a resolution in the Official Gazette to increase the daily minimum salary from MXN 80.04 to MXN 88.36.

Effective Date: 1 December 2017

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